Jessica McLaughlin Stansbury is a Transportation partner in Oliver Wyman's Washington office. Alex Hill is an engagement manager in Chicago.

Airline passengers may not know about blockchain yet, but the new technology may make their travel loyalty programs easier to use. Photo Credit: Paul J. Richards/AFP/Getty Images)

All across the United States, across the globe for that matter, there are people racking up points on travel loyalty programs. They’re flying, staying at hotels, renting cars. Most often, they are simply using certain credit cards that give them travel points from purchases. The question is whether the panoply of programs is actually engendering loyalty.

Travel loyalty programs, more so than other categories, have become much more complex over time, less transparent, and more difficult to use. Customers don’t understand why some purchases earn more points than others. And for most average travelers, it doesn’t matter because they have a hard time accumulating enough points to ever take advantage of the rewards anyway.

As a result, a lot of points go unredeemed, and travel companies don’t build loyalty. In fact, often the complexity is counterproductive when it comes to generating loyalty, if customers assume that the rules and lack of transparency are intended to discourage them from ever using the benefits promised. Ironically, companies are suffering too, as accounting laws now force them to account for liabilities from the accumulating points without the ability to recognize the associated revenue until they are cashed in.

Next stop: travel programs

No doubt, blockchain technology has arrived and has the potential to disrupt travel’s loyalty business model, just as online travel agencies did to the distribution business model several years ago. The technology is a constantly reconciled digital ledger technology that enables an entire ledger of transactions to be shared across all participants in the network. The advantage of blockchain is that it allows users to reach consensus about a transaction without the need for a middleman or clearinghouse mechanism. It is also proving to be incredibly resilient to hackers at a time when security of customer data is paramount.

Though Bitcoin, the cryptocurrency and digital payment system, is currently the most famous business built on blockchain, there are hundreds if not thousands of other businesses already existing or underdevelopment today that leverage this technology in applications ranging from smart contracts to supply-chain tracking to identity verification and protection.

Blockchain has the potential to reduce the complexity of current travel loyalty programs and provide customers a way to easily determine the points they are holding at any time across multiple programs, combine them in “one wallet,” and then redeem them instantaneously across a broader set of options.

The benefits of getting in early

For travel corporations that want to get ahead of the game, early adoption may offer some benefits - despite the risks inherent in any new technology. Getting in ahead of competition puts them in the best position to create commercial relationships with the most attractive partners and add them quickly and easily. With adoption of blockchain, one might expect smaller programs to band together or ally with larger ones. Travel companies also may want to look for tech partners or payment card processors to work with.

Two dangers for airlines, hotels, and other travel companies: Who owns the customer data and who is the face of the blockchain? And given that blockchain could add a transaction layer between the customer and merchant, travel companies may ultimately have a harder time communicating directly with their members – as is the case with online travel agencies.

That said, it is safe to say that blockchain is coming, given the infectious nature of technological innovation, and when it does, it will affect loyalty programs in a material way. Will airlines, hotels, and other travel companies be ready? Perhaps, especially if they start planning now.